Given growing global disenchantment with US currency, the Swiss franc and the Canadian and Australian dollars are poised for further gains, write Pamela and Mary Anne Aden of The Aden Forecast.
The US dollar is very weak for valid, fundamental reasons:
- the federal government’s debt load
- inflation
- the Fed’s monetary policies
This is also one of the big reasons why gold is rising so strongly. Gold is real money and it rises during uncertain times. Gold sees the truth, and it’s telling us that the dollar’s days of dominance are over.
This will take time, of course. Major changes like this always do—but it’s happening.
As [newsletter author] Richard Russell explains so well, “Few Americans realize the advantage the US has enjoyed over the years, in being able to print the very currency our debts are denominated in. The US has been able to print trillions of dollars that it never earned. Somewhere ahead, the reserve status of the dollar is going to bump into the wall of non-acceptance.”
And this is what we’re starting to see.
This will accelerate the dollar’s decline, and it will come as a shock to most people. The dollar itself is sending this message. It was the worst performing currency over the past six months.
What to do? If you have too many dollars, diversify into precious metals and other currencies that are stronger.
The Canadian dollar, for instance, remains very strong, at a three-year high. Middle East tensions are keeping the oil price high—and as oil goes, so goes the Canadian dollar.
The Australian dollar is similar. It moves with commodities. And thanks to the ongoing rise in gold and other commodities, the Aussie dollar recently hit its highest level since 1983, when it began to trade freely.
This month we bought the Swiss franc. It’s been very strong, and continues to benefit from Switzerland’s safe haven status. The Swiss franc is a good currency investment.
[The ETF proxy for the Swiss franc, CurrencyShares Swiss Franc Trust (FXF) is up almost 7% year-to-date. The CurrencyShares Australian Dollar Trust (FXA) is up nearly 8% over the same span, while the CurrencyShares Canadian Dollar Trust (FXC) has risen 5% in 2011—Editor.]
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